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Detroit filed for Chapter 9 bankruptcy protection (USAToday)

Detroit filed for Chapter 9 bankruptcy protection (USAToday)

Submitted by tobi_ger on Fri, 2013-07-19 01:30

So this happened...
Detroit files for bankruptcy protection

Probably expected by many in the US?

zjmo2 |
19. juli 2013

I have read that Tesla has been looking for a second factory for future models and I'm sure there are many to choose from in Detroit. I think Tesla and Detroit could be a perfect match... skilled auto technicians and a new American auto company. A good marketing idea as well.

carlk |
19. juli 2013

@zjmo2 Perhaps but Tesla is more a Silicon Valley company than a traditional auto company. The cultural differences may not work too well.

eAdopter |
19. juli 2013

I think Tesla should avoid Detriot.
It's a place where unions hold automakers hostage, have too much influence in decisions. I will never purchase a car made in Detriot - Chrysler being a prime example.

(Sorry Chrysler fans - they suck)

TikiMan |
19. juli 2013

eAdopter,

I agree with you. Building a car is not an easy job, and I would hate to have mine assembled in a place where the quality of life for the worker/assemblers is so depressing.

With that said, I hope Detroit can rebuild itself to the prosperity it was back in the 1960's and 1970's. However, I just don't see the auto industry surviving there in the future. The motor has left the city.

KevinR.co.us |
19. juli 2013

+1 TikiMan

earlyretirement |
19. juli 2013

What a mess. A judge just said it's illegal. We'll see how it plays out.

Forget Dteroit. Tesla and Austin, Texas would be perfect match, except for brain dead Texas politicians in bed with sleazy auto dealers. Great city with very intelligent silicon valley like background. Problem is that it is in State of Texas.

jdb |
19. juli 2013

I of course meant Detroit, not Dteroit. Did flunk typing in high school for a reason.

jchangyy |
19. juli 2013

@eadaptor. I actually like the Grand Cherokee, especially since the revision in 2011, I think. My friends and family members who live in Michigan drive it and most of them have over 100k miles on it with no problems at all. I think that some of the American models have made great strides over the last decade and I hope they continue to do so. I hope that one day, we'll be talking about the Great 4 American automakers. (including Tesla)

ENGINEER |
19. juli 2013

Tesla is planning a lot of SuperChargers in Texas, so they must be rather confident that Texas will overturn the Tesla banning legislation when possible, especially after the whitehouse.gov response. When do we get to read about that anyways?

Brian H |
19. juli 2013

The Tesla is not banned in Texas, just sales.

zjmo2 |
20. juli 2013

The reason carlk gave for Tesla not going to Detroit may be the reason they should go. A Silicon Valley company with skilled auto technicians would be a great match. Property is cheap in Detroit and there are plenty of vacant factories to choose from. There is a sophisticated distribution system already in place there as well. eAdopter points out that Detroit is a depressing place where unions hold automakers hostage. Anyone who has lived in or visited the south, where many of the automakers have located to, has seen "depressed" first hand. If Detroit is depressed, it is because of the exodus of the American auto manufacturing jobs to Mexico and other (cheaper) areas. The only ones holding anyone hostage have been the American auto execs, who have been holding everyone hostage over the years with their poorly designed, crappy products that no one really wants. The SF bay area is one of the last remaining union areas in the country and it has had no effect on Tesla. Tesla and Detroit could be a good match.

AmpedRealtor |
20. juli 2013

At least right now, I think Tesla wants its development and technology teams to be in close proximity to their manufacturing teams in order to allow for extremely fast tweaks to its production process to address manufacturing issues. In this regard, it will be difficult for Tesla to find qualified technology talent in Detroit, and Tesla is fundamentally a technology company.

Given the fact that Tesla is currently occupying and using only a small portion of the entire NUMMI plant that it owns, there is a lot of expansion room for the future without needing to buy more plants.

tobi_ger |
20. juli 2013

AR
Imagine how many robots could fit there? Skynet is coming, I tell 'ya! :)

negarholger |
20. juli 2013

@AmpedRealtor - for a young company best move is to have your factory close by your development - things can be fixed fast. Factory only 3 hours away and an afternoon fix becomes 2 weeks minimum. Been there, done that.

CalDreamin |
20. juli 2013

If Tesla opens another manufacturing plant, I think it would be in Europe or Asia to protect against currency exchange rate fluctuations.

carlk |
20. juli 2013

@zjmo2 It might be a good thing for Detroit if they can learn to adapt Silicon Valley culture through the joint venture. On the other hand it may not work too well if they still can't change their old habits. I'm not talking about union or anything like that. It's just the 9 to 5 get my things done (slowly) keep everything the way they are and not to offend anyone until I get my pension attitude.

@jdb I agree Austin can be a good place for Tesla. BTW Austin is not Texas ideologically. The other two big metro areas are pretty progressive (by Texas standard) too. The problem (yes it is a problem) is the rural and small town bible belt areas. Things will change eventually I believe. Remember even California was not this progressive not too long ago.

Mel. |
20. juli 2013

zimo2, Detroit has the highest business taxes in the country. This might be one of the reasons companies prefer to go to other places.

Brian H |
20. juli 2013

Ausin-izing Texas would strangle, stomp, and rot the goose laying the gold eggs.

Vall |
20. juli 2013

Does tesla feel any lack of skilled workers in the Fermont Factory? No, they don't, they have 3000 strong workforce that is dedicated to the success of the company. The facility itself is huge, it produced 500k cars a year, it will be decades before tesla reaches those numbers, if at all. Their goal is also to have as much in-house production as possible. So they don't lack space, they don't lack workers, they don't lack parts suppliers, why on earth would they move to detroit of all places??? Because it has skilled workers? Really? Are they any more skilled than the california workers, or any other workers in any of the right-to-work states? If yes, in what way exactly are they more skilled?

tobi_ger |
20. juli 2013

I think it's not about skill but availability in CA. There is no other car factory in CA, whereas in Detroit there may still be many workers looking for such a job (but not everyone could just move to CA).

Brian H |
20. juli 2013

TM has no shortage of qualified applicants! And they can offer a major climate upgrade to anyone from Michigan, for free.

negarholger |
20. juli 2013

Brian - housing cost climate ? Coming from Michigan you will be in a free fall into despair.

Brian H |
20. juli 2013

Sunshine hours per year. Ice-free days/year.

dirk.saenen |
21. juli 2013

Administrators as CEO's, and Unions as partners.
Recipe for disaster.

Brian H |
21. juli 2013

Government-nominated BoD. Catastrophic.

stevenmaifert |
21. juli 2013

Detroit's bankruptcy has little to do with the auto industry. It's due to the exodus of upper and middle class property taxpayers fleeing a city riddled with crime, infrastructure decay, and public official corruption. The primary driver of the debt is underfunded public employee pension and benefit plans, not the health of the auto industry.

dirk.saenen |
21. juli 2013

the decline of MotorCity was triggered by the troubles of the big Three, way back in late 70's/early 80's. Unemployment leads to crime and infrastructure decay.

Of course, in the good old days, DetroitCity started distributing the wealth generated by the BigThree, thinking it would last forever; and now finds itself underfunded.